300th new condo tower of this real estate cycle proposed for South Florida

Developers have not been this bullish about the prospects of the South Florida condo market for at least a decade.

In a testament to that widespread developer optimism, the 300th new condo tower of this current South Florida real estate cycle has just been announced east of Interstate 95 in the tricounty region of Miami-Dade, Broward and Palm Beach, according to the preconstruction condo project website CraneSpotters.com. (Disclosure: My firm operates the website.)

By comparison, developers created fewer than 250 new condo towers east of I-95 in the seven largest coastal markets of South Florida during the previous cycle between 2003 and 2010, according to an analysis of government property records.

To achieve this latest preconstruction milestone, a Florida corporation based in Greater Downtown Miami obtained approval of its plans at a Dec. 2 Planning & Zoning Board meeting to build a 22-story mixed-use tower with 75 condo units on a bayfront site in the island community of North Bay Village.

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The project — for which a name has not yet been announced — represents the seventh new condo tower with a combined 721 units proposed during this cycle for the municipality of North Bay Village that has a population of 7,500 residents.

This new project to be built in the 1600 block of the Kennedy Causeway is one of five towers planned along a mile stretch of a series of bridges over Biscayne Bay that connects Northeast 79th Street on the Miami mainland with 71st Street in Miami Beach.

Prior to this current real estate cycle, North Bay Village had 33 condo towers with about 2,800 units that were created during the previous five decades between 1964 and 2010.

If all of the new towers proposed during this boom actually get built, North Bay Village’s total number of units would increase by about 26 percent to more than 3,525 condos, according to an analysis of records from the Florida Division of Condominiums, Timeshares And Mobile Homes.

This recent spurt of proposed condo towers in North Bay Village makes the two-island municipality the 10th most active preconstruction market east of I-95 in South Florida based on a market share of about 1.8 percent.

The most active South Florida market for preconstruction condo development is by far that 60-block stretch of Greater Downtown Miami between the Julia Tuttle Causeway and the Rickenbacker Causeway from Biscayne Bay west to I-95.

Developers have announced at least 70 new condo towers with about 18,000 units and counting in Greater Downtown Miami since 2011. This market represents about 45 percent of the nearly 40,000 new condos proposed for South Florida during the current real estate cycle.

The Hollywood-Hallandale Beach market in southeast Broward County is the second most active preconstruction condo market with 21 new towers and more than 4,750 units proposed. This area accounts for nearly 12 percent of the new units announced during this boom.

The Downtown Fort Lauderdale and beach market is the third most active preconstruction market with 24 new condo towers with more than 2,550 units announced, representing 6.4 percent of all units proposed for South Florida.

Rounding out the top five most active preconstruction condo markets are Sunny Isles Beach with 18 new towers and more than 2,325 units for a 5.8 percent share and West Palm Beach with 12 new towers and more than 2,120 units proposed for a 5.3 percent share.

To date, a supermajority of the South Florida preconstruction condo projects have been proposed in Miami-Dade County where foreign buyers have historically been active investors of real estate especially with the weak U.S. dollar of recent years.

Miami-Dade currently accounts for nearly 200 proposed towers with about 28,500 units for a 71 percent share of all South Florida preconstruction condos announced during this cycle.

Broward County is a distant second with 19 percent of the current South Florida preconstruction condo market based on 57 new towers proposed with more than 7,700 units for this boom.

Palm Beach County ranks third with 46 new condo towers proposed with nearly 3,700 units for a nine percent share of all South Florida preconstruction activity.

Miami-Dade County is expected to lose some of its preconstruction condo market share in future months as foreign currencies weaken and an increasing number of domestic buyers look north to Broward and Palm Beach counties for cheaper presale alternatives.

The unanswered question going forward is whether changing global economic conditions could diminish some of the exuberance currently being displayed in South Florida’s preconstruction condo market of 2014.

Peter Zalewski is a principal with the Miami real estate consultancy Condo Vultures. Zalewski, a licensed Florida real estate professional since 1995 and founder of CVR Realty and Condo Vultures Realty LLC, advises developers, lenders and institutional investors. Zalewski also runs the preconstruction condo project website CraneSpotters.com in conjunction with the Miami Association of Realtors.

Pre-construction condo projects price survey

This is a summary of South Florida’s preconstruction condo projects, as of November, east of I-95 that are pre-selling units.

County

Total

towers

Total

floors

Total Presale

Units

Presale Units

Currently Sold

Ratio of

units presold

Minimum mean price

PSF for presold Units

South Florida

146

2,887

17,664

11,802

67%

$772

Miami-Dade

98

2,462

15,050

10,163

68%

$855

Broward

30

321

2,081

1,428

69%

$537

Palm Beach

18

104

533

211

40%

$472

Source: CraneSpotters.com research from the exclusive listing brokerages of the respective projects as of Nov.7